Sunday, June 1, 2014

Which Australian Bank Pays The Best Dividends?

Australian Banks have long been popular investments among Aussie investors. One of the reasons has been the fact they have been among the best paying dividend shares.

Below is a table of the 6 largest banks listed on the ASX. They are ordered according to which bank pays the best dividends. All of the distributions paid by  shares listed in the table below are fully franked.

ASX
Code
Company Name Current
Price
Dividend
Yield
Annual
Growth
Rate
Payout
Ratio
NAB National Australia Bank $33.49 5.9% 6.8% 80%
BEN Bendigo and Adelaide Bank $11.73 5.3%9.5% 76%
ANZ ANZ Banking Group $33.49 5.2% 12.6% 70%
BOQ Bank of Queensland $12.00 5.2% 3.6% 90%
WBC Westpac $34.42 5.2% 13.7% 78%
CBA Commanwealth Bank $81.59 4.7% 12.4% 75%

As you can see the National Australia Bank is a clear leader in terms of yield, but there are a number of other factors to consider.

Sunday, May 25, 2014

What Are Exchange Traded Funds And How Do They Work?

In his 2013 annual letter to shareholders, Warren Buffett put forward some ideas on ETFs. He discussed how in his will he's left instructions for 90% of the money which is to be held in trust for his wife to be invested in (low cost) ETFs. If one of the most successful investors in history is recommending exchange traded funds, maybe the rest of us should have a closer look as well.

What Is An ETF?

It's a product which provides investors with relatively low cost exposure to a broad range of companies or other invest-able assets. They are traded on the stock market just like the shares of listed companies.

An ETF tracks an index like the ASX300 or the price of a commodity like gold.  This means that investors should receive the same return as they would if the held all of the shares which make up the index, or in the cast of something like gold, it would be similar to buying gold.

Saturday, May 17, 2014

Cheap Shares - 3 Companies Worthy Of Further Research

I am drawn to cheap shares as a result of my having both feet planted firmly in the value investing camp. Of course cheap can be a somewhat subjective term with different meanings for different investors.  However, a good starting place for me is normally to begin with stocks trading at or close to their lowest price over the past 12 months.

Here is a list if 3 companies whose shares are trading close to their lowest price over the past year and in which I intend to conduct further research.